IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v42y2003i4p715-723.html
   My bibliography  Save this article

Foreign Direct Investment, Exports, and Domestic Output in Pakistan

Author

Listed:
  • Mohsin Hasnain Ahmad

    (Applied Economics Research Center, University of Karachi, Karachi.)

  • Shaista Alam

    (Applied Economics Research Center, University of Karachi, Karachi.)

  • Mohammad Sabihuddin Butt

    (Applied Economics Research Center, University of Karachi, Karachi.)

Abstract

The impact of the policy reform on economic performance has been one of the stifling issues in development economics in the recent years. Since the middle 1970s, there has been considerable progress in the trade reform in the most developing countries, turning from an import substitution strategy to export-oriented approach. Pakistan also follows export-oriented policies. Pakistan’s trade pattern and trade policy have been moving towards fewer and fewer controls, tariffs rates have come tumbling down. Export-led-growth hypothesis (ELG) suggests that due to positive correlation between export and growth, therefore, export-oriented policies contribute to economic growth. Thus, international trade and development theory suggests that export growth contributes positively to economic growth. On the basis of this framework, most empirical work on the effects of export promoting strategy followed in developing countries evaluated openness with trade. Empirical research about the effect of this liberalisation process has treated export as principal channel for growth. The relationship with exports and growth, grounded in endogenous growth theory, has been tested for Pakistan.

Suggested Citation

  • Mohsin Hasnain Ahmad & Shaista Alam & Mohammad Sabihuddin Butt, 2003. "Foreign Direct Investment, Exports, and Domestic Output in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 42(4), pages 715-723.
  • Handle: RePEc:pid:journl:v:42:y:2003:i:4:p:715-723
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/2003/Volume4/715-723.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ashfaque H. Khan & Afia Malik & Lubna Hasan, 1995. "Exports, Growth and Causality: An Application of Co-integration and Error-correction Modelling," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 34(4), pages 1001-1012.
    2. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    3. Grossman, Gene M. & Helpman, Elhanan, 1995. "Technology and trade," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 25, pages 1279-1337, Elsevier.
    4. repec:bla:reviec:v:8:y:2000:i:3:p:448-61 is not listed on IDEAS
    5. Henrik Braconier & Karolina Ekholm, 2000. "Swedish Multinationals and Competition from High‐ and Low‐Wage Locations," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 448-461, August.
    6. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    7. Blomstrom, Magnus, 1986. "Foreign Investment and Productive Efficiency: The Case of Mexico," Journal of Industrial Economics, Wiley Blackwell, vol. 35(1), pages 97-110, September.
    8. Judith Giles & Cara Williams, 2001. "Export-led growth: a survey of the empirical literature and some non-causality results. Part 1," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(3), pages 261-337.
    9. Qazi Masood Ahmed & Mohammad Sabihuddin Butt & Shaista Alam, 2000. "Economic Growth, Export, and External Debt Causality: The Case of Asian Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 591-608.
    10. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    11. Gene M. Grossman (ed.), 1996. "Economic Growth," Books, Edward Elgar Publishing, volume 0, number 553.
    12. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    13. Judith A. Giles & Sadaf Mirza, 1999. "Some Pretesting Issues on Testing for Granger Noncausality," Econometrics Working Papers 9914, Department of Economics, University of Victoria.
    14. Mohammad Akbar & Sabahat Zareen F. Naqvi, 2000. "Export Diversification and the Structural Dynamics in the Growth Process: The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 573-589.
    15. Masih , Abul M.M. & Masih, Rumi, 1994. "On the Robustness of Cointegration Tests of the Market Efficiency Hypothesis: Evidence from Six European Foreign Exchange Markets," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 47(2-3), pages 160-180.
    16. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, vol. 39(1), pages 31-57, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad Arshad Khan & Abdul Qayyum, 2007. "Trade Liberalisation, Financial Development and Economic Growth," PIDE-Working Papers 2007:19, Pakistan Institute of Development Economics.
    2. Nasim Shah Shirazi & Turkhan Ali Abdul Manap, 2005. "Export-Led Growth Hypothesis: Further Econometric Evidence From South Asia," The Developing Economies, Institute of Developing Economies, vol. 43(4), pages 472-488, December.
    3. Fugarolas, Guadalupe & Mañalich, Isis & Matesanz, David, 2007. "Are Exports Causing Growth? Evidence On International Trade Expansion In Cuba, 1960-2004," MPRA Paper 6323, University Library of Munich, Germany.
    4. Nasim Shah Shirazi & Turkhan Ali Abdul Manap, 2004. "Exports and Economic Growth Nexus: The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(4), pages 563-581.
    5. Adeel Saleem & Maqbool H. Sial & Ahmed Raza Cheema, 2023. "Does an asymmetric nexus exist between exports and economic growth in Pakistan? Recent evidence from a nonlinear ARDL approach," Economic Change and Restructuring, Springer, vol. 56(1), pages 297-326, February.
    6. Waithe, Kimberly & Lorde, Troy & Francis, Brian, 2010. "Export-led Growth: A Case Study of Mexico," MPRA Paper 95557, University Library of Munich, Germany.
    7. Cheam Chai Li & Rosli Mahmood & Hussin Abdullah & Ong Soon Chuan, 2013. "Economic Growth, Tourism and Selected Macroeconomic Variables: A Triangular Causal Relationship in Malaysia," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 7(2), pages 185-206, May.
    8. Ghazi Al-Assaf & Bashier Al-Abdulrazag, 2015. "The Validity of Export-Led Growth Hypothesis for Jordan: A Bounds Testing Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 199-211.
    9. Ambreen FATEMAH & Abdul QAYYUM, 2018. "Modeling the impact of exports on the economic growth of Pakistan," Turkish Economic Review, KSP Journals, vol. 5(1), pages 56-64, March.
    10. Raza, Syed Ali & Jawaid, Syed Tehseen & Afshan, Sahar, 2013. "Is Stock Market Sensitive to Foreign Capital Inflows and Economic Growth? Evidence from Pakistan," MPRA Paper 48399, University Library of Munich, Germany.
    11. Galimberti, Jaqueson K., 2009. "Conditioned Export-Led Growth Hypothesis: A Panel Threshold Regressions Approach," MPRA Paper 13417, University Library of Munich, Germany.
    12. Syed Raza & Syed Jawaid, 2014. "Foreign capital inflows, economic growth and stock market capitalization in Asian countries: an ARDL bound testing approach," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 375-385, January.
    13. Sayef Bakari, 2017. "The Three-Way Linkages Between Export, Import And Economic Growth: New Evidence From Tunisia," Journal of Smart Economic Growth, , vol. 2(3), pages 13-53, December.
    14. Fakhri J. Hasanov & Muhammad Javid & Frederick L. Joutz, 2022. "Saudi Non-Oil Exports before and after COVID-19: Historical Impacts of Determinants and Scenario Analysis," Sustainability, MDPI, vol. 14(4), pages 1-38, February.
    15. Musleh-Ud Din, 2004. "Exports, Imports, and Economic Growth in South Asia: Evidence Using a Multivariate Time-series Framework," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(2), pages 105-124.
    16. Ady Soejoto & Waspodo Tjipto Subroto & Suyanto, 2015. "Fiscal Decentralization Policy in Promoting Indonesia Human Development," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 763-771.
    17. Banu Demirhan, 2016. "Financial Development and Investment Amount Nexus: A Case Study of Turkey," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(3), pages 127-134, March.
    18. Sushil Kumar Haldar, 2009. "Economic Growth in India Revisited," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 10(1), pages 105-126, January.
    19. Utku Utkulu & Durmus Özdemir, 2005. "Does Trade Liberalization Cause a Long Run Economic Growth in Turkey," Economic Change and Restructuring, Springer, vol. 37(3), pages 245-266, September.
    20. Ademola Obafemi Young, 2019. "Economic Growth and Demographic Dividend Nexus in Nigeria: A Vector Autoregressive (VAR) Approach," Asian Social Science, Canadian Center of Science and Education, vol. 15(2), pages 1-37, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:42:y:2003:i:4:p:715-723. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.